For the year ending December 31, 2019, Hub Ltd. has an allowable capital loss of $115,000, as well as a non-capital loss of $85,000. Neither of these losses can be carried back. The Company has no loss carry forwards from years prior to 2019.
On January 1, 2020, using the provisions of ITA 87, Hub Ltd. is amalgamated with Core Inc. The combined Company is named Hubcore Ltd. and, because Core is much larger than Hub, its shareholders receive the majority of voting shares in the combined company. Hubcore will have a December 31 year end.
During the year ending December 31, 2020 Hubcore has Net Income For Tax Purposes of $200,000. This total is made up $85,000 in taxable capital gains and $115,000 of net business income. Of the $115,000 in net business income, $52,000 was earned by the division that continued to pursue Hub's line of business.
Will Hubcore Ltd. be able to deduct the losses incurred by Hub Ltd. prior to the amalgamation during the taxation year that ends on December 31, 2020? Explain your conclusion.

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The Answer of For the year ending December 31, 2019, Hub Ltd. has an allowable capital loss of $115,000, as well as a non-capital loss of $85,000. Neither of these losses can be carried back. The Company has no loss carry forwards from years prior to 2019.
On January 1, 2020, using the provisions of ITA 87, Hub Ltd. is amalgamated with Core Inc. The combined Company is named Hubcore Ltd. and, because Core is much larger than Hub, its shareholders receive the majority of voting shares in the combined company. Hubcore will have a December 31 year end.
During the year ending December 31, 2020 Hubcore has Net Income For Tax Purposes of $200,000. This total is made up $85,000 in taxable capital gains and $115,000 of net business income. Of the $115,000 in net business income, $52,000 was earned by the division that continued to pursue Hub's line of business.
Will Hubcore Ltd. be able to deduct the losses incurred by Hub Ltd. prior to the amalgamation during the taxation year that ends on December 31, 2020? Explain your conclusion.

For the Year Ending December 31, 2019, Hub Ltd